Well-known Chinese news site Sina recently reported that the government of the United States warned the European Union not to grant Market Economy Status to China. The U.S. cautioned that conferring this Status could damage the effort to prevent China from dumping underpriced goods into the EU and the U.S. markets. Obtaining the Market Economy Status via the World Trade Organization (WTO) is one of China’s core strategic goals. In addition to other ways in which the Chinese side would benefit, it would be much harder for the EU and the U.S. to collect high tariffs on Chinese goods. Among EU members, Germany and Britain are supporters of granting China this Status. However, the majority of the rest of the EU countries, headed by Italy, are strongly against the idea. More and more labor unions and traditional industries such as Iron & steel, ceramics, and textiles support these countries. China argued that China should automatically be granted the Status based on its WTO sign-on agreement. However, many lawyers have observed that the government exercises significant control of the Chinese economy. The EU seems to be leaning towards granting the Status but no final decision has been made.
Source: Sina, December 28, 2105